Oil prices rise as U.S. imposes Venezuelan tariffs

Oil prices in Europe and the U.S. rose for a fifth straight day on expectations that global supply may tighten. This comes after the U.S. announced tariffs on countries that buy Venezuelan crude, though gains were limited as producers in the OPEC+ group indicated they plan to go ahead with an output hike in May.

The Trump administration announced a 25% tariff on countries importing oil and gas from Venezuela, with China, the largest buyer of Venezuelan crude, already subject to U.S. tariffs. The administration also extended a deadline for U.S. producer Chevron to wind down operations in Venezuela.

The imposition of these tariffs is anticipated to significantly tighten the global oil supply, with analysts noting that this action could lead to a substantial constriction in the global oil balance. Oil loading activities at Venezuela's main ports have already slowed, reflecting the immediate impact of the U.S. policy on Venezuela's oil export operations.

Despite these supply concerns, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) plan to proceed with an output increase in May. However, internal quota adjustments within OPEC+ may offset the overall supply boost, potentially limiting the impact of the planned production hike on global oil prices.

The convergence of U.S. tariffs on Venezuelan oil and the upcoming OPEC+ output decisions underscores the complexities influencing current oil market dynamics, with stakeholders closely monitoring these developments to assess their long-term implications on global supply and pricing structures.